H-1B visa fraud is becoming a significant issue in the U.S. as companies exploit the system to cut costs and take advantage of workers. Recently, two major developments revealed how HCL, an IT outsourcing company, used H-1B visas to defraud workers and the government.
What is the H-1B Visa?
The H-1B visa is a nonimmigrant work visa that allows U.S. employers to bring foreign workers with specialized skills to the United States for a specific period. This visa is intended for employers who want to hire nonimmigrant aliens in specialty occupations or as fashion models of distinguished merit and ability. A specialty occupation requires highly specialized knowledge and at least a bachelor’s degree or its equivalent.
HCL’s $95 Million Wage Theft Scheme
The Economic Policy Institute (EPI) in Washington, D.C., exposed how HCL, an Indian IT outsourcing company, cheated its H-1B employees out of approximately $95 million. As one of the largest users of H-1B visas in the U.S., HCL was supposed to bring skilled foreign workers to fill temporary jobs. Instead of paying these workers the same wages as their U.S. employees, HCL paid them significantly less. This is both illegal and unfair to American and foreign workers.
Whistleblower Lawsuit: A New Way to Fight H-1B Visa Fraud
A whistleblower lawsuit brought this fraud to light. A former HCL executive filed a qui tam lawsuit, which allows private citizens to help the government recover money lost to fraud. These lawsuits, based on the False Claims Act from the Civil War era, provide a way to combat companies that cheat the government. If the whistleblower and their lawyers win, they receive a share of the recovered money as a reward.
What the Evidence Showed
The whistleblower lawsuit uncovered internal HCL documents that demonstrated how the company systematically underpaid its H-1B workers as part of its competitive strategy. The EPI report, authored by Professor Ronil Hira of Howard University and Daniel Costa, Director of Immigration Law and Policy Research at EPI, explains:
“The H-1B statute requires that employers pay their H-1B workers no less than the actual wage paid to their similarly employed U.S. workers. But EPI analysis of an internal HCL document shows that large-scale illegal underpayment of H-1B workers is a key part of the firm’s competitive strategy.”
Legal Loopholes that Enable H-1B Visa Fraud
The EPI report also highlighted that the U.S. Labor Department treats “contractor hires” differently from “direct hires” when enforcing wage rules. This loophole enables companies like HCL to underpay workers without facing consequences. The report calls on the Labor Department to take stronger action to close these gaps and protect workers.
Financial Impact on the U.S. Government
HCL’s wage theft harmed workers and cost the U.S. government money. By underpaying workers, the company avoided paying millions in taxes. This included Social Security, Medicare, and unemployment insurance. Additionally, HCL misused other types of visas, like B-1 (tourist) visas and L-1 (international executive) visas. Those visas are cheaper, but not intended for regular workers.
The Importance of Whistleblowers in Exposing H-1B Visa Fraud
While the lawsuit documents do not directly mention “qui tam,” using the False Claims Act to fight H-1B visa fraud has proven to be a new and effective strategy. Hopefully, this case will encourage more whistleblowers to come forward regarding H-1B visa fraud.
What Needs to Be Done Next
The EPI report urges the U.S. Labor Department to step up enforcement against companies that misuse H-1B visas and exploit workers. Stronger actions are necessary to protect both American and foreign workers from exploitation and shield U.S. taxpayers from the consequences of H-1B visa fraud.
Conclusion: Taking Action Against H-1B Visa Fraud
The case against HCL underscores the need for increased oversight and stronger enforcement of laws to prevent H-1B visa fraud. Whistleblower lawsuits, such as qui tam actions, can help hold companies accountable for their illegal practices. Greater awareness and legal action are crucial to ensuring fairness in the H-1B visa program and protecting workers’ rights.
